Jonathan Steffanoni (left) and Harry Chemay

Criticism over the Quality of Advice Review legislation relating to obligations for trustees to monitor conditions for advice fees deducted from a member’s account is misguided, according to consultants for the funds.

The QAR legislation, tabled last month, repeals and replaces section 99FA of the Superannuation Industry Supervision Act with the intention of giving greater clarity over how advice fees can be charged from a member’s super account.

But the legislation has received heavy criticism from the Joint Associations Working Group, along with licensee groups, who felt the wording of the law put too heavy a burden on super funds which meant it would not be worth the compliance risk of allowing members to charge external advice fees.

Superannuation and wealth management consultant, and former financial adviser, Harry Chemay says his reading of the bill is that trustees won’t be required to check every piece of advice.

“This is an amendment to a piece of legislation that already exists right now,” Chemay tells Professional Planner.

“That basically says if a super fund gets a member request from an external adviser and it all checks, then by all means sure, the super fund is able to make a direct payment to the adviser. This is just a clarification, and the explanatory memorandum says that.”

Jonathan Steffanoni, former managing partner of QMV Legal and now with Legal & Prudential, says the changes to the law aren’t substantive.

“It’s not considered to be a big deal,” Steffanoni says, contending the tabled legislation won’t change how s99FA currently operates, other than making it less ambiguous.

“I get the sense some of the concern may have been resulting [from] the list of requirements and obligations that are placed on the trustee to assure themselves that it’s appropriate for the fees to be deducted,” Steffanoni says.

He adds the list of conditions trustees need to meet before a member’s account can be charged remains consistent with the existing law.